Business Taxation in Global Economy

Business taxation is at the very heart of business affairs and practice. In recent years it has also caught the media and the public’s attention following revelations that many well-known multinational  companies  were  able  to  structure  their  affairs  in  a  way  that  significantly lowered their global tax liabilities. This led to claims that these companies were paying less than  their  “fair  share”  of  tax,  to  parliamentary  enquires  on  the  issue  and  even  to  public protests outside the retail outlets of some of these companies. At the same time, concerns were  raised  that  the  existing  system  for  taxing  companies  is  not  suited  for  a  digitalised economy. These and other concerns have led to an unprecedented coordinated international process of reform involving 137 countries. This process, which is still on-going, could lead to the most fundamental reform of the international corporate tax system since its foundations were put in place in the 1920s. But some countries, including France and the UK, sped ahead, introducing new taxes targeting digital giants such as Facebook, Amazon and Google, leading the US to threaten broader retaliation through tax and trade measures. International business taxation is highly politically sensitive. 

All this means that there has never been a more exciting time to study business taxation. Not only is it of huge importance in practice, but we are also living in a period of unprecedented public, media  and  political  interest  in  the  topic  and  unprecedented  change.  The Covid-19 pandemic has only sharpened the focus on taxation. Countries around the world will either increase existing  taxes  or  introduce  new  taxes  to  raise  further  revenues  to  repay  the  eye-watering costs of the crisis. This course will provide you with a solid understanding of how business tax systems work in a domestic and international setting. But it aims to do much more. It looks at black letter tax law but always in the context of the policy behind it. The course will thus set out some of the basic policy  choices  that  are  made  when  designing  a  business  tax  system  and  assess  their strengths and weaknesses. In other words, it will critically evaluate the existing system and the different options  for  reform.  It will  also  take  a  step  back  and  ask  more  fundamental questions,  including:  Does  a  properly  functioning  international  business  tax  system  require cooperation among countries? Can the international tax system take account of the interests of developing countries? And most fundamentally, should we have a corporation tax at all? To undertake this critical  evaluation  and  to  answer  these  questions  we  need  to  combine  a rigorous understanding of the law with an understanding of concepts drawn from economics and  other  disciplines  that  are  essential  to  good  tax  policy  making.  We adopt this dual approach on this course. We will engage with the law as it emerges from statutes, case-law and international treaties, as well as concepts, theory and empirical results from economics and other literatures.